Best Small Business Insurance in Pennsylvania

Pennsylvania Insurance Requirements

The Commonwealth of Pennsylvania requires that all businesses operating within the commonwealth that employ any full-time or part-time employees must carry workers' compensation insurance on their employees. 

In addition, companies in Pennsylvania must also carry commercial auto insurance on any vehicles that they own and are registered to be operated on the road.

Workers’ Compensation Insurance

Pennsylvania’s Workers' Compensation Act mandates that all employers in the state must provide workers' compensation insurance for their employees, with very few exceptions.

The Workers’ Compensation Act requires that employers are liable for compensation for injuries (or death) that occur on the job, without regard to fault or negligence. Section 301 (a) states:

Every employer shall be liable for compensation for personal injury to, or for the death of each employe, by an injury in the course of his employment, and such compensation shall be paid in all cases by the employer, without regard to negligence, according to the schedule contained in sections three hundred and six and three hundred and seven   1 of this article:  Provided, That no compensation shall be paid when the injury or death is intentionally self inflicted, or is caused by the employe's violation of law, including, but not limited to, the illegal use of drugs, but the burden of proof of such fact shall be upon the employer, and no compensation shall be paid if, during hostile attacks on the United States, injury or death of employes results solely from military activities of the armed forces of the United States or from military activities or enemy sabotage of a foreign power. In cases where the injury or death is caused by intoxication, no compensation shall be paid if the injury or death would not have occurred but for the employer's intoxication, but the burden of proof of such fact shall be upon the employer. 

Pennsylvania goes on to define “employee” in Section 104:

The term “employee,” as used in this act is declared to be synonymous with servant, and includes-

All natural persons who perform services for another for a valuable consideration, exclusive of persons subject to coverage under the Longshore and Harbor Workers' Compensation Act (44 Stat. 1424, 33 U.S.C. § 901 et seq.) or the Merchant Marine Act of 1920 (41 Stat. 988, 46 U.S.C. § 861 et seq.) or persons whose employment is casual in character and not in the regular course of the business of the employer, and exclusive of persons to whom articles or materials are given out to be made up, cleaned, washed, altered, ornamented, finished or repaired, or adapted for sale in the worker's own home, or on other premises, not under the control or management of the employer.  Except as hereinafter provided in clause (c) of section 302 and sections 305 and 321,  1 every executive officer of a corporation elected or appointed in accordance with the charter and by-laws of the corporation, except elected officers of the Commonwealth or any of its political subdivisions, shall be an employe of the corporation.  An executive officer of a for-profit corporation or an executive officer of a nonprofit corporation who serves voluntarily and without remuneration may, however, elect not to be an employe of the corporation for the purposes of this act.  For purposes of this section, an executive officer of a for-profit corporation is an individual who has an ownership interest in the corporation, in the case of a Subchapter S corporation as defined by the act of March 4, 1971 (P.L. 6, No. 2),  2 known as the “Tax Reform Code of 1971,” or an ownership interest in the corporation of at least five per centum, in the case of a Subchapter C corporation as defined by the Tax Reform Code of 1971.

Pennsylvania Code Title 34: Chapter 121 also requires that employees be furnished with workers’ compensation insurance information at the time of hire and as soon as possible after any workplace injury:

Section 121.3: Providing workers’ compensation information.

(a)  The workers’ compensation information specified in subsection (b) shall be provided to every employee at the time of hire and immediately after the injury, or as soon thereafter as possible under the circumstances of the injury. If the employee’s injuries are so severe that emergency care is required, the information shall be given as soon after the occurrence of the injury as is practicable.

(b)  The information shall be entitled ‘‘Workers’ Compensation Information’’ and include the following:

(1)  The workers’ compensation law provides wage loss and medical benefits to employees who cannot work, or who need medical care, because of a work-related injury.

(2)  Benefits are required to be paid by your employer when self-insured, or through insurance provided by your employer. Your employer is required to post the name of the company responsible for paying workers’ compensation benefits at its primary place of business and at its sites of employment in a prominent and easily accessible place, including, without limitation, areas used for the treatment of injured employees or for the administration of first aid.

(3)  You should report immediately any injury or work-related illness to your employer.

(4)  Your benefits could be delayed or denied if you do not notify your employer immediately.

(5)  If your claim is denied by your employer, you have the right to request a hearing before a workers’ compensation judge.

Commercial Auto Insurance

The Commonwealth of Pennsylvania requires that all vehicles owned and registered within the state must carry auto insurance. According to Pennsylvania Law Title 75: Chapter 17, Section 1786, all motor vehicles currently operated or registered in the state must be covered by financial responsibility:

(a): General rule.--Every motor vehicle of the type required to be registered under this title which is operated or currently registered shall be covered by financial responsibility.

The statute goes on to require that the registrant of motor vehicles self-certify that the registrant is financially responsible when registering the vehicle (either being covered by an insurance policy or self-insuring)

(b):  Self-certification.--The Department of Transportation shall require that each motor vehicle registrant certify that the registrant is financially responsible at the time of registration or renewal thereof. The department shall refuse to register or renew the registration of a vehicle for failure to comply with this requirement or falsification of self-certification.

And, Pennsylvania law requires that registrants of a motor vehicle provide proof of financial liability, if requested, to the Department of Transportation or police.

(c):  Consent to produce proof of financial responsibility.--Upon registering a motor vehicle or renewing a motor vehicle registration, the owner of the motor vehicle shall be deemed to have given consent to produce proof, upon request, to the Department of Transportation or a police officer that the vehicle registrant has the financial responsibility required by this chapter. Proof of financial responsibility may be satisfied under this chapter by production of a financial responsibility identification card in paper or electronic form. If an owner of a motor vehicle is providing electronic proof of financial responsibility to a police officer, the police officer shall only view content that is reasonably necessary to demonstrate proof of financial responsibility. The owner of the electronic device assumes liability for any damage to the electronic device containing the financial responsibility identification card while in possession of the police officer or agents of the department.

Pennsylvania Code Title 52: Chapter 32 - Subchapter B also sets additional specific insurance requirements for certain businesses and business vehicles, including:

• Passenger Carriers
• Property and Household Goods Carriers   
• Cargo Carriers  
• Air Carriers  

Data Breach Insurance

Pennsylvania’s Data Breach Notification Statute creates an obligation for a business that handles personal information to notify residents if their information has been or is suspected of being compromised.

The duty to inform residents if their personal information has been accessed by an authorized person exposes a business to the possibility of facing allegations of negligence. A business found at fault could find itself having to pay substantial damages, particularly if there are many affected individuals and they have suffered losses through misuse of their information. For that reason, Pennsylvania businesses should consider taking out data breach insurance, which will cover claims for compensation in such a situation.   

2303: Notification of breach

An entity that maintains, stores or manages computerized data that includes personal information shall provide notice of any breach of the security of the system following discovery of the breach of the security of the system to any resident of this Commonwealth whose unencrypted and unredacted personal information was or is reasonably believed to have been accessed and acquired by an unauthorized person.

Pennsylvania Insurance Resources

Pennsylvania Department of Labor and Industry
Pennsylvania Department of Motor Vehicles
Pennsylvania Insurance Department
Pennsylvania Workers’ Compensation Employer Information
Insurance Overview
Insurance Law Fact Sheet
Automobile Insurance Guide
Questions and Answers About Automobile Insurance in Pennsylvania

General Liability Insurance

The vast majority of Pennsylvania companies purchase general liability insurance from an insurance company even though it is not legally required. This type of business liability insurance covers third-party bodily injury, third-party property damage, advertising liability, libel, slander, copyright issue, and other common claims faced by companies across various industries. 

General liability insurance is one of the most important types of business insurance your company can purchase.

Business Owner’s Policy

A business owner’s policy (BOP) is an affordable way to bundle business insurance coverages. This type of policy includes commercial general liability insurance with commercial business property insurance. Many small business owners with a physical business space opt for this coverage.

Commercial Auto Insurance

You need to carry commercial auto insurance if your company uses vehicles to transport people or goods. This type of insurance is very similar to personal auto insurance and covers liability, medical costs, collisions, and uninsured/underinsured motorists. A commercial auto policy also covers vehicles rented or owned by your company and employees who use their own vehicles for company business.

Workers’ Compensation Insurance

Pennsylvania requires businesses with any full-time or part-time employees to carry workers’ compensation insurance. Nevertheless, it’s a good idea to subscribe to such insurance. Taking out workers' compensation insurance puts a limit on the amount and type of compensation that an injured employee may receive. The limits are set by law.

Employee Health/Life/Disability Insurance

Companies that provide health, life, and/or disability insurance as a fringe benefit will need appropriate Pennsylvania insurance. Under the Affordable Care Act, firms with more than 50 full-time employees must offer health insurance or pay an expensive penalty.

Professional Liability Insurance

Professional liability insurance covers financial risks to attorneys, accountants, and other people who provide professional services or expertise. Professional liability coverage varies depending on the industry but usually includes negligence, legal defense, slander or libel, and copyright and trademark disputes. 

Professional liability insurance includes errors and omissions (E&O) insurance.

Data Breach Insurance

If your company hosts customers’ personal information on its servers and those servers are hacked, lawsuits and damages can result. Data breach insurance protects you in these cases. 

Cyber Liability Insurance

Similar to but more comprehensive than data breach insurance, cyber liability insurance may pay for legal expenses related to a data breach or set up a call center for individuals affected by a breach. It also may pay for active protection against cyberattacks.

Commercial Crime Insurance

Crimes like extortion, forgery, burglary, computer fraud, and embezzlement are covered by commercial crime insurance. Situations in which this type of insurance is particularly useful include dishonest or libelous acts by employees.

Fiduciary Liability Insurance

Fiduciaries, who are legally required to act in plan participants’ best interests rather than the company’s when choosing advisors and investments, should consider this type of insurance coverage. It covers them if they are sued for allegedly providing negligent investment advice or administering plans or benefits incorrectly. 

Third parties like out-of-company consultants and benefit plan administrators are usually not protected.

Directors and Officers Insurance

Any company with directors and officers should consider directors and officers (D&O) insurance coverage, a type of liability insurance that reimburses directors and officers for claims made against them regarding harm allegedly caused by their management decisions.

Executive Risk Coverage

Executive risk insurance is business liability insurance that provides coverage for fraud, D&O, employment practices, initial public offerings, pension funds, extortion, and professional negligence.